TUCSON, Ariz.--(BUSINESS WIRE)--Liberty Star Uranium & Metals Corp. (“Liberty
Star” or the “Company”)(LBSR:
OTCQB) is pleased to announce it has signed a binding loan
settlement agreement (the “Agreement”) with Northern
Dynasty Minerals Ltd. (“Northern
Dynasty” or “NDM”)
(NDM:TSX,
NAK: NYSE MKT). The Agreement calls for the settlement of Liberty
Star’s entire debt to Northern Dynasty, termination of the JV
negotiations between the two companies, transfer of a portion of the
Company’s Big Chunk properties to Northern Dynasty and a new border for
Liberty Star’s land position on the Big
Chunk Super Project, south block. This effectively releases the need
to raise approximately $5 million dollars to repay the NDM note as well
as releasing all pledged collateral. We will now move forward
unencumbered.

The relationship between the Company and Northern Dynasty originated in
2010 as an agreement in which Northern Dynasty acquired 60.7 KM or 13%
of Liberty Star’s land on the Big
Chunk Super Project (“BCSP”) for $1,000,000, loaned to Liberty Star
an additional $3,000,000, and proposed a definitive earn in option and
binding joint venture agreement. The initial 2010 document provided that
the loan would be secured by the Company’s Big Chunk Super Project
property in Alaska and accrued interest at 10% per annum (NR
95). Further interim loans were made by Northern Dynasty to Liberty
Star over the past two years.

According to the newly signed loan settlement agreement the balance of
the loan (US$3,730,174 in principal, plus $872,543 accrued interest)
from Northern Dynasty is completely discharged and Northern Dynasty’s
right to earn in the remaining property is terminated. As settlement,
Northern Dynasty’s subsidiary U5 Resources receives 199 Alaska mining
claims within the south block of the Big Chunk Super Project. Liberty
Star, through its Alaska subsidiary Big Chunk Corp, retains 229 Alaska
mining claims (55 sq. miles) within the BCSP’s south block. Liberty Star
also retains all claims within the BCSP North Block (184 Alaska mining
claims). The transaction is scheduled to close by the end of November.

States Liberty Star CEO/Chief Geologist Jim Briscoe, “This is an
important breakthrough that satisfies both parties – a win-win
situation. We retain a major land position in the Big Chunk south claim
block including eight drill targets indicated by geochem and enhanced
ZTEM data, as well as geology and aeromagnetics. Our work of this past
summer covers assessment work for two assessment years. We will be able
to continue exploration at Big Chunk within the redrawn south block in
our normal methodical, scientific way. Also, as we approach potential JV
partners we do it as a debt free company. This will be particularly
helpful in going forward with our Tombstone,
Arizona Hay Mountain Project, which is undergoing an archaeological
survey, part of the permitting process.”

Statements in this news release that are not historical are forward
looking statements. Forward-looking statements in this news release
include: that we will close our agreement with Northern Dynasty and
become debt free. Factors which may delay or prevent these
forward-looking statements from being realized include; we may not be
able to agree on final terms with Northern Dynasty; or raise sufficient
funds to remain debt free.Despite encouraging data there may be
no commercially exploitable mineralization on our properties.Readers
should refer to the risk disclosures in the Company’s recent 10-K and
the Company’s other periodic reports filed from time to time with the
Securities and Exchange Commission.